(Business 2.0) – Venture capitalists love to repeat a popular refrain: "I invest in people, not business plans." That may be, but they still want to see a plan. Not that a business plan will secure millions in funding on its own merits, of course; its real purpose is just to get a VC to pay enough attention to your idea to call you back. The wrong plan, though, could get you barred from the front door.

The first misstep to avoid may seem obvious, but venture firms routinely reject ideas simply because they're sent to the wrong partner--someone whose area of expertise doesn't align with your business. You sent your digital media idea to a telecom specialist? "It'll never leave my inbox," says Philippe Cases, a partner at Partech International. Fortunately for you, we've done this critical bit of work by finding VCs who are just waiting for your pitch. Now all you have to do is write it up.

Just as Hollywood producers get bombarded by unsolicited scripts, venture capitalists are deluged with scores of 50-page business plans, many of which are never read. Hence, another preliminary rule of thumb: Skip the full business plan in favor of an executive summary of less than three pages that hits all the elements highlighted below. Don't worry: If you get that coveted callback, you'll have ample opportunity to wow them with the full 50-page treatment.

TWO-SENTENCE ELEVATOR PITCH

A first-rate executive summary opens with a great lead. Sequoia Capital, one of the first venture firms to back Google, suggests that you should be able to explain your idea on the back of a business card. If you can't lay it out in a gripping sentence or two, a VC might assume you don't have a good grasp of your concept.

DEFENSIBLE DIFFERENTIATOR

Next section: What twist or technology makes your company special and compelling to the market? A common goof entrepreneurs make is expounding too much on the market without first offering up an ironclad defense of the proposed company. Venture firms know a lot more about the market than you do; what they want to hear is how you're going to dominate it.

STRONG MANAGEMENT TEAM

Succinctly describe yourself and the colleagues you're bringing in. "No egos, please" is Woodside Fund managing director John Occhipinti's plea when it comes to choosing the right details. VCs want to see not only the experience you bring to the table, but also the specific skills and accomplishments that prove you and your comrades are up to the job. "When I read, 'I have held leadership positions at companies like Oracle, Microsoft, and IBM,' my eyes roll," Cases says. "What I want to see is a person who initiated a product and saw it to $100 million in sales. I want the two or three things that truly make you different from someone else."

That said, don't exaggerate. At a glance, a VC will likely know what holes need to be filled in the management team. If anything, be up-front about what your team lacks.

REALISTIC MARKET ANALYSIS

Keep your market-size projections conservative and defend whatever numbers you provide. If you're in the very early stages, most likely you can't calculate an accurate market size anyway. Just admit that. Tossing out ridiculous hockey-stick estimates will only undermine the credibility your plan has generated up to this point.

REALISTIC GOALS

Finally, you need to size up your financial targets. "I always have problems with startups making unrealistic assumptions--how much money they need or how quickly they can ramp revenue," Redpoint Ventures's Greg Martin says. "Those can really kill a deal for me." Thus, lay out your revenue projections and capital needs for just three or four years. Don't promise the moon and don't ask for it either: VCs expect you to be frugal.

Another potential deal killer? Offering up ill-founded estimates on the returns the venture firm can expect to see from your company, or what its valuation is. Leave that math to the VC--if you're fortunate enough to get that far. -- M.V.C.